scholarly journals Confucius Institute and the Completion of Chinese Cross-Border Acquisitions

2019 ◽  
Vol 11 (18) ◽  
pp. 5088 ◽  
Author(s):  
Ouyang ◽  
Li
Keyword(s):  
Cultural Distance ◽  
Macro Level ◽  
Host Countries ◽  
Firm Level ◽  
Confucius Institute ◽  
Cross Border ◽  
Country Level ◽  
Using Data ◽  
Global Platform

As a global platform for cultural exchange, the Confucius Institute (CI) has effectively promoted sustainable development among countries and regions. However, existing literature has mostly drawn insights from the national macro-level to study the roles played by CIs, whereas the potential of CIs to influence corporate behaviors has not received extensive attention. This study expands the research on CIs from the national macro-level to the enterprise micro-level by exploring the effect of CIs on the likelihood of acquisition completion. Using data from 1695 Chinese cross-border acquisitions from 2006 to 2017, we find that establishment of CIs can significantly increase acquisition completion likelihood. Furthermore, the level of influence of CIs on acquisition completion depends on country- and firm- level factors. At the country level, the positive effect of CIs on completion likelihood intensifies when cultural distance between host countries and China is great. At the firm level, the acquirer’s past cross-border acquisition experience moderates the effects of CIs, which are more beneficial to firms with no previous successes. In addition, we have made some further analyses, and find that the presence of CIs not only helps to increase the likelihood of acquisitions completion, but also helps to shorten the acquisition durations. The role of CIs in cross-border acquisition completion likelihood do not depend on the types of Chinse enterprises, which indicates that CIs, unlike government agencies, do not offer additional help for SOEs.

scholarly journals Cross-Border M&A Motives and Home Country Institutions: Role of Regulatory Quality and Dynamics in the Asia-Pacific Region

2021 ◽  
Vol 14 (10) ◽  
pp. 468
Author(s):  
Peter Zámborský ◽  
Zheng Joseph Yan ◽  
Erwann Sbaï ◽  
Matthew Larsen
Keyword(s):  
Institutional Environment ◽  
Home Country ◽  
Asia Pacific ◽  
Pacific Region ◽  
Asia Pacific Region ◽  
Cross Border ◽  
Regulatory Quality ◽  
Using Data ◽  
Over Time

The purpose of this paper is to analyze the relationship between home country institutions and cross-border merger and acquisition (M&A) motives of MNEs from the Asia-Pacific region, with a focus on the role of regulatory quality and dynamics. We empirically examine how M&A motives are affected by elements related to risk of the institutional environment of the acquiring firm’s home country regulatory quality over time. The study is grounded in the general theory of springboard MNEs, and the institutional views of cross-border operations, namely the institutional escapism and institutional fostering perspectives. Using data on over 700 cross-border M&As of European firms by Asia-Pacific MNEs in 2007–2017, we analyze the rationales for these deals and their relationship to the institutional characteristics of the buyers’ home countries including regulatory quality and voice and accountability. We found that the quality of home country regulatory environment is significantly related to domestic firms’ motivation for international M&As. However, the significance and sign of the effects differ for different types of motives and over time. Our findings contribute to the literature on general versus emerging MNE-specific internationalization theories (particularly the theory of springboard MNEs) by expounding on the types and dynamics of cross-border M&A motives.

Do Country-level Creditor Protections Affect Firm-level Debt Structure Concentration?

2021 ◽  
Author(s):  
Kose John ◽  
Mahsa S Kaviani ◽  
Lawrence Kryzanowski ◽  
Hosein Maleki
Keyword(s):  
Debt Structure ◽  
Difference In Differences ◽  
Firm Level ◽  
Creditor Rights ◽  
Country Level ◽  
Bankruptcy Costs ◽  
Cash Flow Volatility ◽  
Cross Country ◽  
Using Data ◽  
Alternative Settings

Abstract We study the effects of country-level creditor protections on the firm-level choice of debt structure concentration. Using data from 46 countries, we show that firms form more concentrated debt structures in countries with stronger creditor protection. We propose a trade-off framework of optimal debt structure and show that in strong creditor rights regimes, the benefit of forming concentrated structures outweighs its cost. Because strong creditor protections increase liquidation bias, firms choose concentrated debt structures to improve the probability of successful distressed debt renegotiations. Firms with ex-ante higher bankruptcy costs, including those with higher intangibility, cash flow volatility, R&D expenses, and leverage exhibit stronger effects. Firms with restricted access to capital are also affected more. A difference-in-differences analysis of firms’ debt structure responses to creditor rights reforms confirms the cross-country results. Our findings are robust to alternative settings and a battery of robustness checks.

Access to skilled labor, institutions and firm performance in developing countries

2019 ◽  
Vol 40 (2) ◽  
pp. 328-355 ◽  
Author(s):  
Charilaos Mertzanis ◽  
Mona Said
Keyword(s):  
Developing Countries ◽  
Firm Performance ◽  
Technological Progress ◽  
Skilled Labor ◽  
Firm Level ◽  
Content Type ◽  
Country Level ◽  
Wide Range ◽  
Development Institutions

Purpose The purpose of this paper is to examine the role of access to skilled labor in explaining firms’ sales growth subject to the controlling influence of a wide range of firm-specific characteristics and country-level economic and non-economic factors. Design/methodology/approach The analysis uses a consistent and large firm-level data set from the World Bank’s Enterprise Surveys that includes 138 developing countries. An instrumental variables model with a GMM estimator is used for estimating the impact of access to skilled labor on firm performance. In order to obtain more robust estimators, the analysis introduces country-level controls reflecting the influence of economic and institutional factors, such as economic and financial development, institutional governance, education and technological progress. Findings The results document a significant and positive association between access to skilled labor and firm performance in the developing world. The explanatory power of access to skilled labor remains broadly robust after controlling for a wide range of firm-specific characteristics: sectoral and geographical influences matter. The results also show that the association between labor skill constraints and firm performance is mitigated by country-level factors but in diverse ways. Development, institutions, education and technological progress exert various mitigating effects on firm-level behavior regarding access to skilled labor. Originality/value The paper’s novel contribution is threefold: first, it uses joint firm, sector and country-level information to analyze the role of access to skilled labor on firm performance; second, it uses consistently produced information at the firm level from 138 developing countries; and, third, it considers the controlling impact of a wide range of country-level factors that reflect a country’s overall development, institutions and evolution.

Ownership participation of cross-border mergers and acquisitions by emerging market firms

2015 ◽  
Vol 53 (1) ◽  
pp. 221-246 ◽  
Author(s):  
Monica Yang
Keyword(s):  
Mergers And Acquisitions ◽  
Cultural Distance ◽  
Emerging Market ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Firm Level ◽  
Content Type ◽  
Cross Border ◽  
Emerging Market Firms ◽  
The Relationship

Purpose – The purpose of this paper is to adopt a multi-level approach to investigate what factors shape the content of emerging market firms’ foreign market entry decisions, particularly the ownership participation in cross-border mergers and acquisitions (M&As). In addition, the author would like to know if companies from emerging markets that possess higher (or lower) ownership in cross-border M&As receive higher valuation in the market. Design/methodology/approach – Using panel data of cross-border M&As by emerging market firms from 2000 to 2012, the author tests the hypothesized effects of the independent variables on the level of ownership participation; and uses a standard event study methodology to assess the market reaction of a particular cross-border M&A deal. Findings – The author finds that a country-level factor (institutional distance), an industry-level factor (industry unrelatedness) and a firm-level factor (board concentration) have significant impact on ownership participation in cross-border M&As. The author also finds that investors do give high valuation to those emerging market firms that chose high ownership participation in cross-border M&As. However, the author did not finds the support for the relationship between ownership participation and cultural distance. Neither did the author finds the support for the relationship between ownership participation and board independence. Originality/value – This study enhances the understanding of conditions under which the level of ownership participation in cross-border M&As would increase (decrease) and how the market reacts to high (low) ownership participation of cross-border M&As by emerging market firms.

DETERMINANTS OF DEFENCE INDUSTRY CORRUPTION RISK: FIRM LEVEL EMPIRICAL EVIDENCE USING TRANSPARENCY INTERNATIONAL’S ANTI-CORRUPTION INDEX

2019 ◽  
Vol 64 (03) ◽  
pp. 675-708
Author(s):  
CHANDRASEKHAR KRISHNAMURTI ◽  
DOMENICO PENSIERO ◽  
ESWARAN VELAYUTHAM
Keyword(s):  
Composite Index ◽  
Developed Countries ◽  
Firm Level ◽  
Listed Firms ◽  
Transparency International ◽  
Market Participants ◽  
Country Level ◽  
Defence Industry ◽  
Corruption Index

Since there is a general perception that the defence industry is more susceptible to corruption compared to other sectors, using a unique database provided by Transparency International (TI), we examine the role of firm level antecedents on firm level corruption risk in the defence industry. We find that larger firms have lower levels of firm level corruption risk. Managerial shareholding is associated with higher levels of corruption risk. Firms that voluntarily disclose more information regarding their corruption control systems tend to have lower levels of corruption risk. Finally, listed firms also have lower levels of firm level corruption risk. We find that the “listing effect” is stronger among firms in financially developed countries ostensibly due to the better scrutiny and monitoring by market participants. In our analysis, we control for country level variables such as a composite index of government effectiveness in controlling defence industry corruption.

scholarly journals Exchange Rate Uncertainty and Workers’ Remittances: Empirical Bayesian Approach

2019 ◽  
Vol 3 (2) ◽  
pp. 90-109
Author(s):  
Muhammad Jalib Sikandar ◽  
Hafiz Muhammad Yasin ◽  
Malik Muhammad
Keyword(s):  
Exchange Rate ◽  
Bayesian Approach ◽  
Negative Impact ◽  
Host Countries ◽  
Empirical Bayesian ◽  
Exchange Rate Uncertainty ◽  
Country Level ◽  
Country Characteristics ◽  
Empirical Bayesian Approach

Exchange rate is one of the important determinates of worker’s remittances to a country. Level of exchange rate as well as any fluctuation in it influences the volume of workers’ remittances. The present study uses data of workers’ remittances from ten major countries to Pakistan for the period 1973 to 2012. Uncertainty of exchange rate is estimated through GARCH model. We use Empirical Bayesian approach to compute posterior information (estimates, for which, the GMM estimates are used as prior in order to avoid biasness and inconsistency due to the presence of endogeniety in our model. The Empirical Bayesian estimates are found to be more efficient in terms of significance and correct signs of modeled variables. The findings suggest a significant role of home and host country characteristics in most of the cases. The findings also reveal a negative impact of exchange rate uncertainty on the inflow of remittances. The political instability reveals an insignificant impact on remittances. The study recommends different policy options for different host countries. Apart from the Middle East, the policy for other regions (like USA, Canada, and Germany etc.) must be considered separately to encourage inflow of remittances. Appropriate stabilization measures have to be taken on priority basis to curtail volatility of exchange rates and to ascertain regular inflow of remittances. 

Organisational culture and entrepreneurial orientation: An orthogonal perspective of individualism and collectivism

2019 ◽  
Vol 37 (2) ◽  
pp. 125-152 ◽  
Author(s):  
Younggeun Lee ◽  
Michael Howe ◽  
Patrick M Kreiser
Keyword(s):  
Entrepreneurial Orientation ◽  
Polynomial Regression ◽  
Organisational Culture ◽  
Cultural Dimensions ◽  
Firm Level ◽  
Individualism And Collectivism ◽  
Key Dimensions ◽  
Using Data ◽  
The Relationship

This study contributes to the existing literature regarding the relationship between culture and entrepreneurship. Building upon the precepts of institutional theory, we examine the influence of organisational culture on firm-level entrepreneurial orientation. While entrepreneurship researchers have emphasised the importance of entrepreneurial orientation for firms, the influence of organisational culture in supporting the incidence of entrepreneurial orientation has not been adequately studied. In an effort to contribute to this emergent area of inquiry, we consider the role of two key dimensions of organisational culture − individualism and collectivism – in facilitating entrepreneurial orientation. In doing so, we illustrate the utility of adopting an orthogonal conceptualisation of these cultural dimensions rather than the commonly held unidimensional formulation. We use polynomial regression and response surface methodology to investigate the effects of both dimensions of organisational culture on entrepreneurial orientation. Using Korea as the main context of the study, we support our hypotheses using data collected from 406 Korean small- and medium-sized enterprises.

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